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Loans

12 Months Ended

Dec. 31, 2020

Loans and Leases Receivable Disclosure [Abstract]

Loans

Loans

The following table shows the composition of the Company's loan portfolio as of December 31, 2020 and 2019:

			December 31, 2020												December 31, 2019
Commercial
Real estate			$	442,121,000					29.9		%				$	372,810,000					28.7		%
Construction			56,565,000						3.8		%				38,084,000						3.0		%
Other			285,015,000						19.3		%				218,773,000						16.9		%
Municipal			43,783,000						3.0		%				41,288,000						3.2		%
Residential
Term			522,070,000						35.3		%				492,455,000						37.9		%
Construction			21,600,000						1.5		%				14,813,000						1.2		%
Home equity line of credit			79,750,000						5.4		%				92,349,000						7.1		%
Consumer			25,857,000						1.8		%				26,503,000						2.0		%
Total loans			$	1,476,761,000					100.0		%				$	1,297,075,000					100.0		%

Loan balances include net deferred loan costs of $6,931,000 in 2020 and $7,419,000 in 2019. Pursuant to collateral agreements, qualifying first mortgage loans and commercial real estate, which totaled $378,183,000 and $296,871,000 at December 31, 2020 and 2019, respectively, were used to collateralize borrowings from the Federal Home Loan Bank of Boston. In addition, commercial, residential construction and home equity loans totaling $259,599,000 at December 31, 2020 and $240,133,000 at December 31, 2019 were used to collateralize borrowings from the Federal Reserve Bank of Boston ("FRB") Discount Window Borrower In Custody ("BIC") program. The Bank enrolled to participate in FRB's Payroll Protection Program Liquidity Facility (PPPLF); as of December 31, 2020 no loans had been pledged and no advances taken under the PPPLF.

The Bank is a designated Small Business Administration ("SBA") preferred lender and had processed 1,718 Paycheck Protection Program ("PPP") loan requests totaling $97,566,000 in funds disbursed to qualified small businesses as of December 31, 2020. The Bank is actively working with those borrowers and the SBA towards forgiveness of loan balances per program guidelines, with approximately $37,000,000 in forgiveness payments received through the end of December 2020.

At December 31, 2020 and 2019, non-accrual loans were $6,721,000 and $16,649,000, respectively. For the years ended December 31, 2020 and 2019, interest income which would have been recognized on these loans, if interest had been accrued, was $558,000 and $906,000. Loans more than 90 days past due accruing interest totaled $1,505,000 at December 31, 2020 and $1,560,000 at December 31, 2019. The Company continues to accrue interest on these loans because it believes collection of principal and interest is reasonably assured.

Loans to directors, officers and employees totaled $36,880,000 at December 31, 2020 and $35,071,000 at December 31, 2019. A summary of loans to directors and executive officers is as follows:

For the years ended December 31,			2020						2019
Balance at beginning of year			$	21,134,000					$	22,149,000
New loans			3,544,000						521,000
Repayments			(3,138,000)						(1,536,000)
Retired director			(326,000)						—
Balance at end of year			$	21,214,000					$	21,134,000

For all loan classes, loans over 30 days past due are considered delinquent. Information on the past-due status of loans by class of financing receivable as of December 31, 2020, is presented in the following table:

			30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						All Past Due						Current						Total						90+ Days & Accruing
Commercial
Real estate			$	139,000					$	190,000					$	226,000					$	555,000					$	441,566,000					$	442,121,000					$	—
Construction			13,000						—						80,000						93,000						56,472,000						56,565,000						—
Other			490,000						62,000						2,082,000						2,634,000						282,381,000						285,015,000						1,464,000
Municipal			—						—						—						—						43,783,000						43,783,000						—
Residential
Term			540,000						1,799,000						1,616,000						3,955,000						518,115,000						522,070,000						23,000
Construction			—						—						—						—						21,600,000						21,600,000						—
Home equity line of credit			1,645,000						324,000						367,000						2,336,000						77,414,000						79,750,000						—
Consumer			89,000						42,000						18,000						149,000						25,708,000						25,857,000						18,000
Total			$	2,916,000					$	2,417,000					$	4,389,000					$	9,722,000					$	1,467,039,000					$	1,476,761,000					$	1,505,000

On March 22, 2020, banking regulators issued an Interagency Statement on Loan Modifications and Reporting in response to the onset of COVID-19; shortly thereafter, on March 30, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES") Act was passed. Both the Interagency Statement and the CARES Act provided an exemption for qualified modifications from TDR designation. The Company actively worked with borrowers impacted by the COVID-19 outbreak and as of December 31, 2020, a total of 1,031 loan modification requests for interest-only payments or deferred payments had been completed in conformance with the Interagency Statement or CARES Act, representing $291,100,000 in loan balances, or approximately 19.6% of the loan portfolio. One of these modifications of de minimis amount has been classified as a TDR since being modified. So long as modified terms are met, loans in an active modification are not included in past due loan totals and continue to accrue interest.

As of December 31, 2020, loans totaling $62,208,000 or 4.2% of all loans, remained in either their original modification or a subsequent modification. Modification statuses by portfolio segment are summarized below:

Commercial/Municipal Loan Modifications
			Units			Percentage			Balance			Percentage
Paid Off			61			10.0		%	$	9,027,000		4.0		%
Subsequent Modification			54			9.0		%	32,724,000			14.0		%
Still in Original Modification			16			3.0		%	7,244,000			3.0		%
Out of Modification			470			78.0		%	189,413,000			79.0		%
Total			601			100.0		%	$	238,408,000		100.0		%
Residential Real Estate Modifications
			Units			Percentage			Balance			Percentage
Paid Off			27			7.0		%	$	5,930,000		12.0		%
Subsequent Modification			154			43.0		%	19,468,000			38.0		%
Still in Original Modification			27			7.0		%	2,615,000			5.0		%
Out of Modification			154			43.0		%	23,553,000			45.0		%
Total			362			100.0		%	$	51,566,000		100.0		%

Consumer Loan Modifications
			Units			Percentage			Balance			Percentage
Paid Off			11			16.0		%	$	118,000		10.0		%
Subsequent Modification			3			4.0		%	104,000			9.0		%
Still in Original Modification			4			6.0		%	53,000			5.0		%
Out of Modification			50			74.0		%	854,000			76.0		%
Total			68			100.0		%	$	1,129,000		100.0		%

Of the $213,819,000 in total loans that are Out of Modification, balances of $972,000 were past due as of December 31, 2020, a past due rate of 0.45%.

Information on the past-due status of loans by class of financing receivable as of December 31, 2019, is presented in the following table:

			30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						All Past Due						Current						Total						90+ Days & Accruing
Commercial
Real estate			$	786,000					$	377,000					$	611,000					$	1,774,000					$	371,036,000					$	372,810,000					$	—
Construction			—						14,000						257,000						271,000						37,813,000						38,084,000						—
Other			2,764,000						465,000						1,799,000						5,028,000						213,745,000						218,773,000						1,464,000
Municipal			—						—						—						—						41,288,000						41,288,000						—
Residential
Term			1,129,000						1,132,000						2,379,000						4,640,000						487,815,000						492,455,000						86,000
Construction			—						—						—						—						14,813,000						14,813,000						—
Home equity line of credit			1,169,000						58,000						1,730,000						2,957,000						89,392,000						92,349,000						—
Consumer			291,000						46,000						10,000						347,000						26,156,000						26,503,000						10,000
Total			$	6,139,000					$	2,092,000					$	6,786,000					$	15,017,000					$	1,282,058,000					$	1,297,075,000					$	1,560,000

For all classes, loans are placed on non-accrual status when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when principal and interest is 90 days or more past due unless the loan is both well secured and in the process of collection (in which case the loan may continue to accrue interest in spite of its past due status). A loan is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party. A loan is "in the process of collection" if collection of the loan is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to a current status in the near future.

Cash payments received on non-accrual loans, which are included in impaired loans, are applied to reduce the loan's principal balance until the remaining principal balance is deemed collectible, after which interest is recognized when collected. As a general rule, a loan may be restored to accrual status when payments are current for a substantial period of time, generally six months, and repayment of the remaining contractual amounts is expected, or when it otherwise becomes well secured and in the process of collection. Information on nonaccrual loans as of December 31, 2020 and 2019 is presented in the following table:

As of December 31,			2020						2019
Commercial
Real estate			$	543,000					$	1,784,000
Construction			89,000						256,000
Other			1,481,000						6,534,000
Municipal			—						—
Residential
Term			3,593,000						5,899,000
Construction			—						—
Home equity line of credit			1,015,000						2,171,000
Consumer			—						5,000
Total			$	6,721,000					$	16,649,000

Information regarding impaired loans is as follows:

For the years ended December 31,			2020						2019						2018
Average investment in impaired loans			$	21,088,000					$	31,557,000					$	31,805,000
Interest income recognized on impaired loans, all on cash basis			478,000						735,000						864,000

As of December 31,			2020						2019
Balance of impaired loans			$	16,039,000					$	29,274,000
Less portion for which no allowance for loan losses is allocated			(12,098,000)						(18,212,000)
Portion of impaired loan balance for which an allowance for loan losses is allocated			$	3,941,000					$	11,062,000
Portion of allowance for loan losses allocated to the impaired loan balance			$	462,000					$	2,213,000

Impaired loans include TDR loans and loans placed on non-accrual. These loans are measured at the present value of expected future cash flows discounted at the loan's effective interest rate or at the fair value of the collateral if the loan is collateral dependent. If the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, a specific reserve is established for the difference, or, in certain situations, if the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, the difference is written off.

A breakdown of impaired loans by class of financing receivable as of December 31, 2020, is presented in the following table:

			Recorded Investment						Unpaid Principal Balance						Related Allowance						Average Recorded Investment						Recognized Interest Income
With No Related Allowance
Commercial
Real estate			$	2,060,000					$	2,368,000					$	—					$	4,123,000					$	127,000
Construction			89,000						89,000						—						358,000						—
Other			1,591,000						1,623,000						—						999,000						15,000
Municipal			—						—						—						—						—
Residential
Term			7,335,000						8,629,000						—						8,773,000						193,000
Construction			—						—						—						—						—
Home equity line of credit			1,015,000						1,089,000						—						1,219,000						—
Consumer			8,000						8,000						—						1,000						1,000
			$	12,098,000					$	13,806,000					$	—					$	15,473,000					$	336,000
With an Allowance Recorded
Commercial
Real estate			$	969,000					$	995,000					$	112,000					$	1,018,000					$	43,000
Construction			681,000						681,000						18,000						579,000						30,000
Other			188,000						202,000						169,000						1,193,000						3,000
Municipal			—						—						—						—						—
Residential
Term			2,079,000						2,134,000						163,000						2,073,000						65,000
Construction			—						—						—						—						—
Home equity line of credit			24,000						24,000						—						744,000						1,000
Consumer			—						—						—						8,000						—
			$	3,941,000					$	4,036,000					$	462,000					$	5,615,000					$	142,000
Total
Commercial
Real estate			$	3,029,000					$	3,363,000					$	112,000					$	5,141,000					$	170,000
Construction			770,000						770,000						18,000						937,000						30,000
Other			1,779,000						1,825,000						169,000						2,192,000						18,000
Municipal			—						—						—						—						—
Residential
Term			9,414,000						10,763,000						163,000						10,846,000						258,000
Construction			—						—						—						—						—
Home equity line of credit			1,039,000						1,113,000						—						1,963,000						1,000
Consumer			8,000						8,000						—						9,000						1,000
			$	16,039,000					$	17,842,000					$	462,000					$	21,088,000					$	478,000

Substantially all interest income recognized on impaired loans for all classes of financing receivables was recognized on a cash basis as received.

A breakdown of impaired loans by class of financing receivable as of December 31, 2019, is presented in the following table:

			Recorded Investment						Unpaid Principal Balance						Related Allowance						Average Recorded Investment						Recognized Interest Income
With No Related Allowance
Commercial
Real estate			$	5,235,000					$	5,492,000					$	—					$	7,611,000					$	228,000
Construction			958,000						970,000						—						936,000						47,000
Other			756,000						786,000						—						965,000						29,000
Municipal			—						—						—						—						—
Residential
Term			10,176,000						11,931,000						—						10,033,000						269,000
Construction			—						—						—						—						—
Home equity line of credit			1,087,000						1,151,000						—						997,000						20,000
Consumer			—						—						—						—						—
			$	18,212,000					$	20,330,000					$	—					$	20,542,000					$	593,000
With an Allowance Recorded
Commercial
Real estate			$	1,074,000					$	1,093,000					$	251,000					$	1,528,000					$	60,000
Construction			—						—						—						—						—
Other			6,319,000						6,925,000						1,273,000						6,778,000						—
Municipal			—						—						—						—						—
Residential
Term			2,263,000						2,412,000						237,000						2,424,000						82,000
Construction			—						—						—						—						—
Home equity line of credit			1,401,000						1,412,000						447,000						283,000						—
Consumer			5,000						6,000						5,000						2,000						—
			$	11,062,000					$	11,848,000					$	2,213,000					$	11,015,000					$	142,000
Total
Commercial
Real estate			$	6,309,000					$	6,585,000					$	251,000					$	9,139,000					$	288,000
Construction			958,000						970,000						—						936,000						47,000
Other			7,075,000						7,711,000						1,273,000						7,743,000						29,000
Municipal			—						—						—						—						—
Residential
Term			12,439,000						14,343,000						237,000						12,457,000						351,000
Construction			—						—						—						—						—
Home equity line of credit			2,488,000						2,563,000						447,000						1,280,000						20,000
Consumer			5,000						6,000						5,000						2,000						—
			$	29,274,000					$	32,178,000					$	2,213,000					$	31,557,000					$	735,000

A breakdown of impaired loans by category as of December 31, 2018, is presented in the following table:

			Recorded Investment						Unpaid Principal Balance						Related Allowance						Average Recorded Investment						Recognized Interest Income
With No Related Allowance
Commercial
Real estate			$	8,718,000					$	9,161,000					$	—					$	5,536,000					$	380,000
Construction			721,000						721,000						—						762,000						43,000
Other			1,468,000						1,555,000						—						2,037,000						32,000
Municipal			—						—						—						—						—
Residential
Term			9,136,000						10,317,000						—						9,427,000						289,000
Construction			—						—						—						—						—
Home equity line of credit			972,000						1,035,000						—						1,001,000						20,000
Consumer			15,000						42,000						—						13,000						—
			$	21,030,000					$	22,831,000					$	—					$	18,776,000					$	764,000
With an Allowance Recorded
Commercial
Real estate			$	1,042,000					$	1,059,000					$	260,000					$	3,477,000					$	42,000
Construction			—						—						—						—						—
Other			7,791,000						8,216,000						1,696,000						7,471,000						5,000
Municipal			—						—						—						—						—
Residential
Term			1,768,000						1,998,000						335,000						1,982,000						53,000
Construction			—						—						—						—						—
Home equity line of credit			120,000						124,000						17,000						99,000						—
Consumer			—						—						—						—						—
			$	10,721,000					$	11,397,000					$	2,308,000					$	13,029,000					$	100,000
Total
Commercial
Real estate			$	9,760,000					$	10,220,000					$	260,000					$	9,013,000					$	422,000
Construction			721,000						721,000						—						762,000						43,000
Other			9,259,000						9,771,000						1,696,000						9,508,000						37,000
Municipal			—						—						—						—						—
Residential
Term			10,904,000						12,315,000						335,000						11,409,000						342,000
Construction			—						—						—						—						—
Home equity line of credit			1,092,000						1,159,000						17,000						1,100,000						20,000
Consumer			15,000						42,000						—						13,000						—
			$	31,751,000					$	34,228,000					$	2,308,000					$	31,805,000					$	864,000

Troubled Debt Restructured

A TDR constitutes a restructuring of debt if the Company, for economic or legal reasons related to the borrower's financial difficulties, grants a concession to the borrower that it would not otherwise consider. To determine whether or not a loan should be classified as a TDR, Management evaluates a loan based upon the following criteria:

•The borrower demonstrates financial difficulty; common indicators include past due status with bank obligations, substandard credit bureau reports, or an inability to refinance with another lender, and

•The Company has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments.

As of December 31, 2020, the Company had 74 loans with a value of $11,534,000 that have been classified as TDRs. This compares to 81 loans with a value of $21,424,000 classified as TDRs as of December 31, 2019. The impairment carried as a specific reserve in the allowance for loan losses is calculated by present valuing the cashflow modification on the loan, or, for collateral-dependent loans, using the fair value of the collateral less costs to sell.

The following table shows TDRs by class and the specific reserve as of December 31, 2020:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			13						$	2,558,000					$	106,000
Construction			1						681,000						18,000
Other			6						717,000						96,000
Municipal			—						—						—
Residential
Term			51						7,384,000						149,000
Construction			—						—						—
Home equity line of credit			2						186,000						—
Consumer			1						8,000						—
			74						$	11,534,000					$	369,000

The following table shows TDRs by class and the specific reserve as of December 31, 2019:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			17						$	4,836,000					$	246,000
Construction			1						701,000						—
Other			8						6,932,000						1,231,000
Municipal			—						—						—
Residential
Term			52						8,472,000						200,000
Construction			—						—						—
Home equity line of credit			3						483,000						—
Consumer			—						—						—
			81						$	21,424,000					$	1,677,000

As of December 31, 2020, 14 of the loans classified as TDRs with a total balance of $1,577,000 were more than 30 days past due. One of these loans had been placed on TDR status in the previous 12 months. The following table shows past-due TDRs by class and the associated specific reserves included in the allowance for loan losses as of December 31, 2020:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			—						$	—					$	—
Construction			—						—						—
Other			4						419,000						92,000
Municipal			—						—						—
Residential
Term			8						988,000						5,000
Construction			—						—						—
Home equity line of credit			1						162,000						—
Consumer			1						8,000						—
			14						$	1,577,000					$	97,000

As of December 31, 2019, 13 of the loans classified as TDRs with a total balance of $1,510,000 were more than 30 days past due. Two of these loans had been placed on TDR status in the previous 12 months. The following table shows past-due TDRs by class and the associated specific reserves included in the allowance for loan losses as of December 31, 2019:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			—						$	—					$	—
Construction			—						—						—
Other			4						371,000						131,000
Municipal			—						—						—
Residential
Term			8						972,000						86,000
Construction			—						—						—
Home equity line of credit			1						167,000						—
Consumer			—						—						—
			13						$	1,510,000					$	217,000

For the year ended December 31, 2020, three loans were placed on TDR status. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as of December 31, 2020:

			Number of Loans						Pre-Modification Outstanding Recorded Investment						Post-Modification Outstanding Recorded Investment						Specific Reserves
Commercial
Real estate			—						$	—					$	—					—
Construction			—						—						—						—
Other			—						—						—						—
Municipal			—						—						—						—
Residential
Term			2						234,000						185,000						21,000
Construction			—						—						—						—
Home equity line of credit			—						—						—						—
Consumer			1						8,000						8,000						—
			3						$	242,000					$	193,000					21,000

For the year ended December 31, 2019, 11 loans were placed in TDR status. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as for December 31, 2019.

			Number of Loans						Pre-Modification Outstanding Recorded Investment						Post-Modification Outstanding Recorded Investment						Specific Reserves
Commercial
Real estate			2						$	109,000					$	90,000					$	90,000
Construction			—						—						—						—
Other			1						98,000						98,000						—
Municipal			—						—						—						—
Residential
Term			8						996,000						872,000						72,000
Construction			—						—						—						—
Home equity line of credit			—						—						—						—
Consumer			—						—						—						—
			11						$	1,203,000					$	1,060,000					$	162,000

As of December 31, 2020, Management is aware of seven loans classified as TDRs that are involved in bankruptcy with an outstanding balance of $810,000. As of December 31, 2020, there were 22 loans with an outstanding balance of $2,216,000 that were classified as TDRs and were on non-accrual status, two of which, with an outstanding balance of $254,000, were in the process of foreclosure.

Residential Mortgage Loans in Process of Foreclosure

As of December 31, 2020, there were 11 mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $1,109,000; this compares to 14 mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $1,502,000 as of December 31, 2019.

X

- References

No definition available.

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- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2196772

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